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Begin part 3 of 3
THE PLAYS:
Good movers: AEOS; HYSL; VIP; WYNN; EXPD
New Plays:
New Post-Split Play:
Play Date: 09/09/2006
CWTR (Coldwater Creek--$27.25; +0.19; optionable): Apparel stores and catalog sales
http://biz.yahoo.com/p/c/cwtr.html
STATUS: Cup w/handle. You go to the website and you still cannot find any information on that creek that has the cold water in it. CWTR is working on a handle at the 10 day EMA (26.96) to its 4 month cup base. After gapping higher the third week of August on strong same store sales it rallied to 28 and last week started the comeback to shakeout the short term profit takers and set up the next run higher. May take a couple more sessions at the 10 day EMA to finish the shakeout, so we are going to be patient and let it set up and show the next break higher. We are calling this one a post-split, but it is rapidly approaching its prior split prices. Thus if it gives us a nice entry point we can view it as getting a jump start on a pre-announcement play.
Volume: 838.136K Avg Volume: 1.517M
BUY POINT: $28.25 Volume=2.3M Target=$33.95 Stop=$26.75
POSITION: UCJ AE - Jan. $25c (66 delta) &/or Stock
http://www.investmenthouse.com/cs/cwtr.html
Play Date: 09/09/2006
THQI (THQ, Inc.--$26.95; +1.55; optionable): Interactive games
http://biz.yahoo.com/p/t/thqi.html
STATUS: Double bottom w/handle. Kids spend too much time watching TV and these games don't help. Indeed, the demographics are also shifting to older males. Sorry ladies; you have been outsourced by a game box. In any event, THQI rallied off a double bottom that formed in June and July, moving up to 27 in August, matching the highs at the start of the base back in April. It ended August and spent the first week in September consolidating that move, forming a handle to he base over the 18 day EMA (25.72). Then Friday it surged higher on strong volume on word that game sales were strong despite the Xbox slump and PlayStation delay. Strong 6 to 3 accumulation in the base (6 up price weeks on rising volume to 3 down price weeks on rising volume) shows solid buying during the base, and this burst in volume Friday indicates the big money is interested still. Looking for that strong volume to continue as THQI makes the breakout and follows its strong money flow higher.
Volume: 2.534M Avg Volume: 1.367M
BUY POINT: $27.44 Volume=2.1M Target=$31.75 Stop=$25.65
POSITION: QHI AE - Jan. $25c (65 delta) &/or Stock
http://www.investmenthouse.com/cs/thqi.html
Downside:
Play Date: 09/09/2006
ATW (Atwood Oceanics--$43.67; -1.93; optionable): International offshore drilling
http://biz.yahoo.com/p/a/atw.html
STATUS: Put. ATW surged Tuesday on volume on CVX' announcement regarding its deepwater field extension well. That sent a ripple through the offshore drilling sector, but that ripple could not stop the negative action in the energy stocks. ATW immediately turned back down and Friday, after a modest gap higher, it sprang a leak and sank below the 50 day EMA (44.37). Looking for ATW to drill deeper and test the August low near 40.50. A move to the target lands us a 42%ish gain.
Volume: 271K Avg Volume: 383.049K
BUY POINT: $43.48 Volume=385K Target=$41.00 Stop=$43.89
POSITION: ATW VI - Oct. $45p (-54 delta)
http://www.investmenthouse.com/cs/atw.html
Play Date: 09/09/2006
RS (Reliance Steel--$31.50; -0.41; optionable): Metals processing, fabrication
http://biz.yahoo.com/p/r/rs.html
STATUS: Put. Going to the well again on RS as it continues its downtrend that started in May. A straight drop below the 18 day EMA (32.56) July through late August, and then a gap higher the last week of that month looked promising. A week long lateral move then started to fail last week. Ready to fill that gap toward the August low (29.80). A move to the target lands a 41%ish gain.
Volume: 659.7K Avg Volume: 1.25M
BUY POINT: $31.35 Volume=1.2M Target=$29.85 Stop=$31.65
POSITION: RS VF - Oct. $30p (-33 delta)
http://www.investmenthouse.com/cs/rs.html
PRE-ANNOUNCEMENT PLAYS
We consider many stocks for pre-announcement plays every week. We get information regarding upcoming announcements and other data that leads us to conclude a split announcement is coming. Even then, however, we have to be discriminating, even more so in the current market. We have to see a strong technical pattern as well, and thus we reject many potential candidates based on a weak technical pattern. Many we considered have announced, but have not fared well given the market was top-heavy and ready to sell or their technical patterns were garbage.
The key today is to find stocks in strong patterns or that are ready to rebound off support. A split announcement will amplify the move higher in these cases as we enjoy moves from strong leaders in position to run higher. We won't chase a stock in a poor technical position even if we know it is going to split; it simply won't do us any good, i.e. it won't make us any money to the upside. We could list all stocks we think are going to split, but again, that won't make us any money unless we are in an office pool as to what stocks will or won't announce a stock split.
Current Pre-Announcement Plays:
This is a list of stocks we are looking to announce splits. We are not in all of the potential splits plays but are letting them set up for the next move. In each report we look at the candidates that are in the best patterns ahead of their potential announcements. This focus on leaders in good patterns allows us to make good money even if companies do not announce the split. The key with splits is the pattern and of course the strong earnings growth that put it in the pattern in the first place.
AAPL: Forecast 10-18-06 after the close
AGN: 9-20-06 at 10:00PT. Held the 50 day EMA and bounced on Friday
APH: Looking to third week of October for an announcement, and it will need to rally before then to be ready.
CMI: Tentative date is 10-31-06. Still at the 90 day MA.
COG: Tentative: 10-26-06. Bombs away. A dry hole for COG as it dives to the 200 day SMA. Will watch how it responds here, but dropping for now.
CPRT: Nothing to end August, but possibly early September. Hearing talk of a split in early September, but no definitive date.
CTSH: 10-31-06.
CVD: Wildcard as no splits in CVD's history. Nice break higher Friday
DHR: Some word on an announcement in the second week of September. Another day at the 50 day EMA after the gap lower.
DRQ: Still holding the trendline. So much for holding the trendline as DRQ drills lower. A test could set up a downside play.
DVA: Mid-September
ESRX: Hearing talk of something in September, but no confirmation information yet. Dipped below the 200 day SMA to end last week. Will see how it holds and if it can set back up.
FMX: Tentatively set at 10-27-06
LUFK: Looking at early September. Nope. Diving lower with the energy sector.
SRCL: Forecast tentatively 10-25-06
SU: Forecast 10-5-06 with a board meeting. Down to the 200 day SMA and beyond. Now THAT is a plunge when the plug is pulled.
TRMB: Reported earnings 7-25-06
VMSI: Forecast tentatively 10-27-06. Still trying to hold and set up at support at 44.
WYNN: Wildcard. No splits in its history but tentatively looking at late October, early November.
XTO: Forecast 10-19-06. X this one out for now as it breaks down to the 90 day MA on strong volume.
NEW PRE-ANNOUNCEMENT PLAYS:
Play Date: 09/09/2006
WST (West Pharmaceutical--$39.96; +0.22; optionable): Components and systems for injectable drug delivery, plastic packaging for healthcare, personal care, and consumer products
BACKGROUND: Last announced a 2:1 split on 8-24-04 at $38.50.
http://biz.yahoo.com/p/w/wst.html
STATUS: Breakout test. WST is making the second test of the July breakout from an 11 week base. It rallied on that first move, then fully tested the breakout by coming back to the 50 day EMA (37.72) before galloping higher again in August up to 42. It peaked and came back last week, holding the 10 day EMA (39.83) on the closes, showing a nice tight doji Friday. Looking for a bounce higher from here as it continues its breakout to move into the play.
Volume: 300K Avg Volume: 245.328K
BUY POINT: $40.44 Volume=350K Target=$46.50 Stop=$39.25
POSITION: WST LH - Dec. $40c (53 delta) &/or Stock
http://www.investmenthouse.com/cs/wst.html
Play Date: 09/09/2006
DIOD (Diodes--$38.32; +0.92; optionable): Semiconductor integrated circuits. Tentatively forecast in early November.
BACKGROUND: Last announced a 3:2 split on 11-7-05 at $37.70. Before that a 3:2 split on 11-4-06 at 24.
http://biz.yahoo.com/p/d/diod.html
STATUS: Ascending base. Nice break higher Friday on a good shot of above average volume, taking DIOD off the 50 day EMA (37.14) as it pinches off in the sixth month of its base. Making higher and higher lows up the 200 day SMA (36.37) while trying to break a couple of lower highs in the pattern; basically a big pennant but looking very positive given the fundamentals that back it up. Strong 6 to 3 accumulation shows plenty of buying (6 up price weeks on rising volume to 3 down price weeks on rising volume) as DIOD sets up for the breakout. Money flow is leading higher and we are looking to start the play as DIOD moves higher on volume through the buy point and then again when it clears 40.
Volume: 438.991K Avg Volume: 353.608K
BUY POINT: $38.97 Volume=500K Target=$45.90 Stop=$37.44
POSITION: DUH LH - Dec. $40c (51 delta) &/or Stock
http://www.investmenthouse.com/cs/diod.html
Play Date: 09/09/2006
DE (Deere & Co.--$81.30; +0.19; optionable): Farm & construction machinery
BACKGROUND: No splits in DE's history, but others in its field have announced.
http://biz.yahoo.com/p/d/de.html
STATUS: Double bottom w/handle. They say nothing runs like a deer, and the green and gold looks ready to gallop once this base completes. Nice surge in late August and on Tuesday to finish the right side of its 9 week base. Now working laterally on lower volume, forming the handle where the near term profit takers are shaken out. Strong earnings helped propel it to that big gain, and after this shakeout toward 80 it will be ready to make the break and put some more serious mileage on to the upside.
Volume: 1.555M Avg Volume: 2.643M
BUY POINT: $82.78 Volume=4M Target=$93.00 Stop=$79.95
POSITION: DE LP - Dec. $80p (60 delta) &/or Stock
http://www.investmenthouse.com/cs/de.html
Play Date: 09/09/2006
LVS (Las Vegas Sands--$69.26; +1.36; optionable): Resorts and casinos
BACKGROUND: No splits in LVS' history.
http://biz.yahoo.com/p/l/lvs.html
STATUS: Cup w/handle. Clark Griswold in 'Vegas Vacation' showed us why these stocks are good when the economy gets iffy: blowing $26K in a few days 'trying to get even' after losing $500 in his first 15 minutes at the blackjack table. LVS was a new issue in late 2004 and enjoyed a strong move this year as it broke out from a long base in January and rallied to 70. It formed a base, broke higher in late June, but then immediately fell into the current 9 week pattern. A little ambitious too soon to sustain another run higher. Now it has formed a better base sporting 4 to 1 accumulation (4 up price weeks on rising volume to 1 down price weeks on rising volume), showing plenty of buying while it consolidates. That sets the foundation to move higher. Bounced Friday off the lows in the handle over the 50 day EMA (66.65), but no volume yet. Getting ready for the break higher that will carry it to a new all-time high. We like the gambling stocks at this juncture because if the economy is going to fade some then the 'sin' stocks tend to do better as consumers roll with their worries at the craps table or count cards at blackjack.
Volume: 1.588M Avg Volume: 2.258M
BUY POINT: $70.05 Volume=3.4M Target=$80.00 Stop=$67.40
POSITION: LVS LN - Dec. $70c (55 delta) &/or Stock
http://www.investmenthouse.com/cs/lvs.html
CONTINUING POST-SPLIT PLAYS:
Play Date: 09/02/2006
BOOM (Dynamic Materials--$35.34; -0.34; optionable): Industrial metal coatings
http://biz.yahoo.com/p/b/boom.html
STATUS: Cup. Still waiting for the boom. Nice test back to the interim highs in the base at 35 to end the week. That should set the next move higher. To recap: Testing back to near support as BOOM sets up to continue higher in its 18 week base formed along the 200 day SMA (32.58). Money flow continues to run higher and after this test we are looking to move into BOOM as it makes the rebound.
Volume: 465.753K Avg Volume: 640.068K
BUY POINT: $36.68 Volume=800K Target=$42.50 Stop=$34.48
POSITION: QCB LG - Dec. $35c (62 delta) &/or Stock
http://www.investmenthouse.com/cs/boom.html
Play Date: 09/07/2006
PSYS (Psychiatric Solutions--$32.96; +0.53; optionable): Inpatient behavioral health services
http://biz.yahoo.com/p/p/psys.html
STATUS: Double bottom w/handle. Played with our minds late Friday as volume surged very late in the session as some buy on close orders hit. That pushed PSYS to the buy point but it was too late in the session to act. Good indication, however, for this week and we will be looking to start some positions as PSYS heads higher this week. To recap: Volume crept higher on PSYS last week as it probed the breakout from its 6 month base that is setting PSYS for a break to a new all-time high. Nice quiet volume in the handle during August indicates a good shakeout setting up the breakout. Money flow is surging higher ahead of price, and with this nice pattern PSYS looks ready to make the break and give us a nice run. Like that it is in healthcare as that makes it a bit more resistant to any September selling.
Volume: 929.037K Avg Volume: 564.212K
BUY POINT: $33.05 Volume=966K Target=$38.00 Stop=$31.50
POSITION: BYU LF - Dec. $30c (66 delta) &/or Stock
http://www.investmenthouse.com/cs/psys.html
CONTINUING LEADER PLAY:
Play Date: 09/07/2006
FSL (Freescale Semiconductor--$30.75; +0.43; optionable): Semiconductors
http://biz.yahoo.com/p/f/fsl.html
STATUS: Cup w/handle. Looked solid Friday, rallying to the buy point but backing off late. Still set up very well to continue higher and the breakout. To recap: After giving us a decent little run in the third leg of the summer rally FSL has faded back Wednesday and Thursday after a strong Tuesday move. It tapped at the 18 day EMA (30.06) on the intraday lows and bounced back, showing a bit stronger, above average volume Thursday. Looking for it to complete the test and then rebound. Want to see some continued strong volume as it does. Nice 17 week pattern has formed over the 200 day SMA (28.12), setting up for a breakout to a new all-time high.
Volume: 2.745M Avg Volume: 2.449M
BUY POINT: $30.94 Volume=3.5M Target=$35.95 Stop=$29.75
POSITION: FSL AF - Jan. $30c (58 delta) &/or Stock
http://www.investmenthouse.com/cs/fsl.html
Good Investing!
Jon L. Johnson and the Stock Split Report Staff.
All of the foregoing is commentary for informational purposes only. All statements and expressions are the opinion of Online Investment Services, LP or its paid consultants and are not meant to be a solicitation or recommendation to buy, sell, or hold securities. We are not licensed or registered in the securities industry. The information presented herein and on our related web site has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. The security portfolio of Partners of Online Investment Services, LP or its paid consultants may, in some instances, include securities mentioned herein and on our web site. Estimates, assumptions and other forward-looking information are subject to the limits of forecasting. Actual future developments may differ materially due to many factors.
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